MBA 1st Year Marketing Management Understanding Consumer Behavior Long Question Answer : MBA 1st 1st Year \ 1st Semester Marketing Management Book Code RMB 106 Questions With Answers 3 Mock Papers for Self Assessment.
MBA 1st Year Marketing Management Understanding Consumer Behavior Long Question Answer | Index
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Section C (MBA Marketing Management Notes)
Long Answer Questions
Q.1. Define the term ‘Market’. Explain the factors determining the expansion of market of a product.
Or What is meant by the term ‘Market’? What are the factors determining Its expansion?
Ans. Meaning and Definition of Market: Market is commonly understood to be a place which is used for buying and selling of goods or it is a place or centre where the sellers and buyers of a producter products come together and perform the activities of sale and purchase of such product or products. But this is not the true meaning of the term ‘Market’ as it presents only a narrow meaning of the term. Really speaking, market is the total demand of a product. Total demand means the composite of individual demands of all the potential buyers of a product. The term market has been defined as follows:
market, in economics, is simply the network of dealings in any factor or
buyers and sellers:
word market signifies a state in which a commodity has a demand ata place where
it is offered
for sale: —J.K. Mehta
‘By a market, economists mean any organisation whereby the buyers and sellers of goods are kept
in close touch with each other: : —Stonier and Hague
‘Economists understand by the term market as not any particular market place in which things are bought and sold, but the whole of any region in which buyers and sellers are in such free intercourse with one another that the price of the same goods tend to equalise, easily and quickly.’ —Cournot
‘The term market is the aggregate of forces of conditions within which buyers and sellers make decisions that result in the transfer of goods and services.’ —American Marketing Association
On the basis of analytical study of above definitions, it can be concluded that market is not a particular place. It means any organisation whereby the buyers and sellers of a product or products are spread over. It maybe a town or a region or a country.
Factors Determining the Expansion of Market
Market for some products is very limited while for some other products, it is very wide. The expansion of market depends upon many factors. These factors may broadly be divided into two parts:
1. Characteristics of the product, and 2. Internal conditions of the country. Details in this regard are as follows:
1. Characteristics of the Product: Charateristics of the product affect the expansion of a market in the following manner:
(a) Demand of the Product: If the demand of a product is universal, the product will have a wide market. On the other hand, if the demand of a product is local, the product will have a limited market. For example, gold and silver have international market due to the nature of their demand.
(b) Nature of the Product: Expansion of market of a product depends to a great extent upon its characteristics. A product may have a wide market only if it is portable, durable and suitable for sampling, grading and description. If the product is perishable or bulky it can never have a
wide market. Its market will be limited. Now-a-days, with development of modern techniques of packaging and preservation, the market of perishable commodities may also be wide but of course, it cannot be as wide as for durable and portable commodities.
(c) Supply of the Product: Supply of a product also affects its market, If the supply of a product cannot be increased beyond a limit, its market cannot be very wide, even it is widely demanded, On the other hand, if the supply of a product can be increased to meet the demand, the market for such product can be expanded.
2. Internal Conditions ofthe Country: Internal conditions of the country also affect the expansion of market of products to a great extent. The Conditions and their effects on the expansion of market of a product or products can be explained as under:
(a) Development of Banking System: Banks are playing very important role in the commercial activities in the present era. It has been a practice among the sellers to negotiate the papers of little use to the goods through banks. Banks collect the payment from buyers and remit the amount to the sellers. So, adequate development of banking system and large network of banks throughout the country is very necessary for the expansion of market for a product or products. If it is not so the market of products cannot be expanded to the wanted mark, even if all other factors are in the favour of such expansion.
(b) Development of Means of Transportation: Means of transportation also play an important role in the development of marketing activities and in the expansion of markets because the products can easily and quickly be transformed from producers to sellers or consumers through improved means of transportation. So, if the means of transportation are adequate and well-developed, the market can be expanded easily.